July 14, 2023

The Psychedelic Renaissance

A. The Psychedelic Renaissance 

For thousands of years, indigenous cultures across the globe have used naturally occurring psychedelic drugs for therapeutic and mystical purposes. In the 20th Century, extensive research showed natural and synthetic psychedelics to be a non-toxic and non-addictive potential breakthrough in the field of psychiatry. However, psychedelics were criminalized and socially stigmatized under the Controlled Substances Act in 1970.

After decades of nonsensical prohibition, the psychedelic renaissance is upon us yet again. Research on the therapeutic potential of psychedelics is booming and bipartisan coalitions are advancing policy across the country to legalize psychedelics for medical and personal use.

As a result of this advocacy, various legal frameworks now provide access to psychedelics at city, state, and national levels. These legal developments have created new opportunities to access psychedelics, while simultaneously causing confusion for folks interested in personal consumption or facilitating the use of psychedelic drugs for others.

Having spent the last 15 years at the forefront of cannabis legalization and economic policy reform, Manzuri Law’s team is now leveraging its unique experience to shape impactful psychedelic policy and guide clients through the uncharted–and constantly evolving–psychedelic legal landscape.

B. Avenues to Access

Currently, there are several different avenues through which psychedelic drugs may be legally possessed, administered or sold in the United States.

  1. Clinical Trials & Research

The medical model is the foremost legal avenue to access psychedelic drugs in the United States. Clinical research on the use of psychedelics to treat mental health is flourishing. Back in August 2017, the U.S. Food and Drug Administration (“FDA”) designated psilocybin and MDMA as Breakthrough Therapies, which effectively fast tracks the drugs’ review and development.

Recognizing the incredible advancements in research, the Biden administration anticipates psilocybin and MDMA will be legalized for the therapeutic treatment of depression and PTSD by 2024. Upon FDA approval, approved psychedelics will then be available in the context of medical treatment.

  1. Local Decriminalization

Psychedelic policy advocates and organizers around the country have enacted local laws that allow individuals to grow, possess, and consume specific psychedelic drugs. These policies, which accommodate the above activities but do not legalize a commercial market, are known as decriminalization policies.

In some U.S. cities, this means that there are no criminal penalties for the cultivation, possession and consumption of certain psychedelic drugs. In other areas, decriminalization policies simply mean that law enforcement has deprioritized enforcement of laws that prohibit the personal use of psychedelics.

We want to note that decriminalization does not mean commercialization and legalization. These policies do not give entrepreneurs a green light to start a commercial psychedelics business, however, this is a distinction that the public has commonly confused. It is important to carefully review your local laws to get a sense of what activity is permitted and what the enforcement penalties may be for violating a law.

  1. State Level Regulated Adult Use

Over the past couple of years, several Western states have begun to create their own regulated adult use programs, which allow for facilitated psychedelic use in certain contexts.

  • Oregon

In November 2020, Oregon voters approved Measure 109, which established the Oregon Psilocybin Services (“OPS”) program. Through OPS, adults (older than 21 years of age) may consume psilocybin under the supervision of licensed “facilitators” in licensed facilities. OPS is governed by the Oregon Health Authority, which sets the standards for psychedelic and cannabis licensing.

To become OPS certified, facilitators need to be 21 years or older, have a high school diploma, pass a criminal background check, complete an approved psilocybin facilitator training program and subsequently, pass the licensing facilitator exam. Initially, the state is also mandating that facilitators be a resident of the state of Oregon, however, this requirement is set to expire in the year 2025. Once approved by OPS, facilitators will then be able to administer psilocybin to participants and supervise their experience.

In tandem, Oregon voters approved Measure 110, which reclassified the possession of controlled substances for personal use from a misdemeanor to a Class E civil violation, which mandates a $100 fine or completed health assessment.

  • Colorado

In 2022, the Centennial state, Colorado passed Proposition 122, also known as the Natural Medicine Health Act, creating a legal framework for the supervised use of psilocybin. This framework also requires the experience to occur at a licensed facility with licensed facilitators, similar to Oregon. However, Colorado’s law allows the program to expand to include several other psychedelic substances including ibogaine, mescaline, and dimethyltryptamine (DMT), so long as the substance is recommended by the Natural Medicine Advisory Board.

By the end of 2024, Colorado will begin accepting applications for the types of businesses that together will build the framework for the regulated adult use program. There will be business opportunities in psilocybin cultivation, operation of healing centers, product manufacturing, testing and research, and service as a psilocybin facilitator and guide.

Proposition 122 also removed all state and local criminal penalties for the cultivation, consumption, and transfer of psilocybin, ibogaine, mescaline, and DMT for personal use. These substances may not be sold, but may be given away. Individuals may receive payment for offering “harm reduction” or “support” services associated with the use of psychedelics.

  • California 

The Golden state is following in the lead of Oregon and Colorado with the proposal of SB 58, which passed the state Senate this year. Similarly, the bill currently aims to remove all criminal penalties for the possession, consumption, and transfer of certain psychedelics, and create a model for facilitated use. However, the details of the bill are subject to change as it is currently being reviewed and amended in the State Assembly.

C. Entering the Industry 

After decades of prohibition, the psychedelics industry is now developing rapidly, with expert analysis anticipating the psychedelics market to hit approximately $12 billion by 2029.

Given the growth and excitement around the positive impact of psychedelics, many folks are looking for strategic ways to enter the industry.

Having led our clients through the early days of cannabis prohibition into the California cannabis market–the largest in the world–our team is well equipped to guide psychedelic entrepreneurs, practitioners, and investors through the evolving psychedelic policy landscape.

If you have any questions about pursuing a potential business interest, contact our cannabis attorneys and psychedelic attorneys in California to ensure you are informed, protected, and set up for success.

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